[Cross-posted at Awkward Utopia]

While we would not wish to live in a world without laws, and a great deal of them are borne of the best intentions, it seems as though sometimes laws have unintended consequences. Broadly speaking, I suspect that the Import/Export laws of various countries throughout the world may also have some unintended consequences. As examples, Italy prohibits export of any of its antiquities, Peru and Mexico have asserted ownership over its cultural patrimony, etc.

When laws prevent or inhibit the trade of objects, that will distort the market for said objects both internationally and domestically. Italy’s efforts to retain its cultural patrimony will have the same result. This is not in and of itself a bad thing, of course, and there have been good reasons articulated for similar laws. But the distortions may include some unintended consequences.

Take Italy for example. There is a scarcity of museums. There is a scarcity of most objects, but there is an acute, distinct scarcity of Italy’s antiquities. Let us for the sake of argument, assume that museums in Italy then possess most of these antiquities. Now, there is general recognition that the antiquities have significant Fair Market Value (FMV). Although demand for the antiquities in Italy is no doubt high amongst private owners, it would likely be even broader in the international market. Since these private owners may not obtain the works they most highly value, and the museums retain them in their collections, these antiquities may artificially stay at the fore of the market. I say artificially because if they were allowed to move internationally, other works would take their places in museums and also receive some positive sanction, increasing the value of an artist’s name in goodwill, possibly creating or fostering new schools of art from the top.

Of course, private owners are free to support new movements in art, but the problem remains that an unintended consequence of the law is that innovation is stifled and the incentive of the market to create and change is reduced.

There may also be unintended consequences in copyright laws. This post on the William Patry blog discusses the length of copyright terms. It seems as though there is a consensus in the economics community, as well as amongst many practitioners in copyright law, that terms are far too long. Dean Price pointed out today that Sonny Bono attempted to protect our “cultural patrimony” (although the reason why Disney is running around China so much is because, amongst other things, China features a full-scale clone of Disneyland!). But the problem didn’t start there, and it goes on relatively unabated. Consider the points of economists such as the renowned Ronald Coase:

  1. The extension provides a very marginal benefit in terms of fostering innovation.
  2. The increased cost of monopoly. Although in some markets, monopolies may arise naturally where there are large barriers to entry (satellites, telecoms, utilities), and they are therefore very good things for consumers, in many cases (legal monopolies, as with copyrights), they may lead to inefficiencies and distorted (i.e. raised) prices. This is so when the monopoly created by copyrights is extended.
  3. There is a cost associated with not being able to develop other things that might be considered “derivative works” of the original. As the heroine of a great Austrian love story once said, “Nothing comes from nothing.”

The extreme form of the argument is that no protection should be given at all and that the value of goodwill would carry the day. This may be true in some cases, but it is irrelevant to the discussion here. The real point is: developments since 1909 in copyright law may have hurt more than helped.

And the story doesn’t end there.

Government programs may have their own agendas, just as private entities would, and adjust their interests in supporting certain types of art accordingly. Food for thought in Finland. In conclusion, there may be several serious problems stemming from unintended consequences to enacting regulations dealing with art. Some are minor, some are far-reaching, but all arise from regulating a field that may be perhaps best left to the market. The real question becomes: are the significant costs of these regulations (import/export restrictions, massive copyright terms, government-funded grants/endowments/programs for arts), whether intended or not, greater than the so-called benefits? If so, are there actually any alternatives politically or legally?

Ladies and gentlemen: why do we have to regulate art at all? If culture is everywhere, in fact, and anything that is not nature is art, then the movement of antiquities into private galleries, dining rooms, or worse merely represents progress as the works go to those who most value them and other equally or eventually-equally valuable works come to the fore. The market does so much better than government in regulating art. I might add that it was government that interfered in the case of the Elgin marbles, as well as countless other plunders.

Thoughts? Rejoinders? Apologies for any forgotten assumptions, shoddy reasoning, or other errors ahead of time. I quickly threw this up today while in Art Law.